S ANUSUIYA,MADURAI vs. ITO NON CORPORATE WARD 1 (1), MADURAI

आदेश / O R D E R

PER GEORGE MATHAN, JUDICIAL MEMBER against the order of the Commissioner of Income-tax (Appeals)-2(i/c), Madurai in dated 06.02.2016 for the assessment &1459/Chny/18 :- 2 -:

“Affidavit of S.Anusuiya I, S.Anusuiya,W/p Mr.S.Selvapandian aged 49 years, residing at 71, Navalar Nagar, 3rd street, SS Colony, Madurai 625 016 do hereby solemnly affirm and sincerely state as follows:-

• I am the Appellant in the appeal and the Petitioner herein and as such I am acquainted with the facts of the case. • For A.Y 2007-08 I filed my Return of Income on 26.05.2008 admitting a total income of Rs. 1,51,650/-, which was taken up for scrutiny. The Assessing Officer completed the assessment by order dated 31.12.2009 accepting the income returned. •Thereafter the Learned Commissioner of Income Tax, issued a notice u/s.263 dated 13.09.2010 proposing to revise the order of assessment. My Representative Mr. R. Alagu an Income Tax Practitioner appeared and made his submissions, The Learned Commissioner of Income Tax vide the impugned order dated 07.02.2011, directed the Assessing Officer to bring, to tax the entire short term capital gains arising on sale of a property. The order was served on 20.02.2011. • At that stage, my representative informed me that the Assessing Officer will give effect to this order and if aggrieved, I can file an appeal to the Commissioner of income Tax (Appeals). Accordingly, when the Assessing Officer passed the order dated 04.05.2011. I preferred an appeal to the Cormmissioner of Income Tax (Appeals), Madurai, on 17th June 2011, within the time permitted under the IT Act. The Commissioner of Income Tax (Appeals) vide his order dated 06.02.2018 dismissed the appeal and this was served on me on 02.03.2018. My Representative Shri R. Alagu passed away on 10.04.2018. • Thereafter, I approached Mr.Paranchothi, Chartered Accountant, Madurai, who advised me that I should file an appeal immediately. Accordingly, I filed an appeal before this Hon’ble Tribunal on 01.05.2018 (ITA No.1459/2018). He informed me that since the due date for filing the is getting over he has filed the appeal forthwith and he would engage the services of Mr.G.Baskar, Advocate, Chennai, for pursuing the appeal and accordingly he forwarded the papers to him vide his letter dated 07.05.2018. On 8th May 2018 itself Mr.G.Baskar replied to us and apprised us that an appeal against the order u/s.263 would be the proper remedy. After discussions with my CA we requested him to prepare an appeal and that is how the present appeal is being filed, •There is a delay of 2584 days in filing the appeal. I submit that from 2011 onwards I am suffering from breast cancer and I underwent mastectomy on 22.10.2012 at Dr. Mohan Prasath, Medicity Hospital, Madurai and even today I am under medication. Immediately after the surgery I was given radiation treatment and Chemotherapy treatment. Even now I am undergoing Chemotherapy and radiation therapy as and when advised by my Doctor. &1459/Chny/18 :- 4 -:

• I am only a housewife fighting for my life. I was acting only at the instructions and advice of Shri R.Alagu, ITP. The fact that an appeal has to be filed directly against the order u/s.263 was not known to me nor my ITP advised me to do so. I diligently preferred an appeal before the Learned CIT (Appeals) as advised by my ITP. Only when we approached Mr.G.Baskar, Advocate, we were advised of the proper remedy. Immediately I took steps to prefer this appeal. • I submit that the only issue in appeal is whether the asset transferred by me is a long-term, capital asset or not. The asset was acquired by me by way of a settlement Deed dated 09.06.2005 executed by my husband. My husband got this property on 10.07.1974 vide a registered Partition Deed. The Learned Commissioner of Income Tax in the impugned order u/s.263 had taken the view that only the period for which I was holding the property should be taken into account and as such what I transferred is only a short term asset. If the period of taken into account, the asset transferred by me is a long term capital asset as per sec.2(42A) of the IT Act. Thus, the view of the Learned Commissioner is not in accordance with the provisions of the I.T Act. Thus, I submit that I have a prima fade case.

• I further submit that the delay in filing the appeal is neither willful nor deliberate but due to all the reasons stated above. I would be put to irreparable loss and hardship if the delay is not condoned.

• In these circumstances, I mostly humbly pray that this Hon’ble Tribunal be graciously pleased to; • condone the delay of 2584 days in filing the present appeal; • Admit, hear and dispose of the appeal in accordance with law; • Pass such further or other order or orders that this Honble Tribunal may deem fit and proper in the circumstances of the case and thus render justice.

It was a submission that the issue in the appeal was squarely covered by the decision of Hon’ble Bombay High Court in the case of CIT Vs. Manjula J.Shah reported in [2013] 355 ITR 474(Bom). It was a submission that the assessee had sold a house property on 03.01.2007 for a consideration of `46,46,000/- and had purchased a house property for `25,00,000/- on 18.01.2007. It was a submission that the assessee had received 50% share in the said property by “Dhana &1459/Chny/18 :- 5 -:

Settlement” from her husband vide document dated 09.06.2005. It was a submission that the assessee’s husband received this property from his mother on 10.07.1974 by way of a registered Partition Deed.

It was a submission that the assessee had brought out all the facts in the return filed by the assessee on 26.05.2008 and the same had been accepted by the ld. Assessing Officer. It was a submission that the Ld.CIT had held that “Dhana Settlement” deed having been executed on 09.06.2005 by her husband and the property having been sold on 03.01.2007, the property was held by the assessee only for 19 months and consequently, the gains from the sale of the same was liable to be treated as giving rise to short term capital gains and not long term capital gains. It was a submission that Hon’ble Bombay High Court in the case of CIT Vs. Manjula J.Shah referred to supra has categorically held that while computing capital gains arising on transfer of capital asset acquired by an assessee under a gift or will, the indexed cost of acquisition has to be computed with reference to year in which the previous owner first held asset and not the year in which the assessee became owner of asset. It was a submission that thus, the basis on which the ld.CIT has passed the order u/s.263 of the Act was erroneous and the order passed u/s.263 of the Act was liable to be annulled. &1459/Chny/18 :- 6 -:

Accordingly, we condone the delay of 2584 days in filing this appeal and the appeal is disposed of on merit.

6.1 A perusal of the decision of Hon’ble Bombay High Court in the case of CIT Vs. Manjula J.Shah clearly shows that when the assessee has received a capital asset under gift or will, the indexed cost of acquisition will be computed with reference to year in which the previous owner first held asset and not the year in which the assessee became owner of asset. Thus clearly in the present case, the assessee herein having received the gift by “Dhana Settlement” on 09.06.2005, the indexed cost of acquisition is to be computed with reference to year in which the previous owner first held asset. That being so, the assessee’s husband took possession of the property in 1974 through Partition Deed with his Mother, obviously, the property was held by the assessee by more than 36 months and consequently, only long term capital gains is liable to be assessed in the hands of assessee. This being so, the order passed u/s.263 of the Act by the ld.CIT is found to be erroneous and the same stands quashed. &1459/Chny/18 :- 7 -: